Employees retiring on June 30 or December 31 are entitled to one notional increment for pension calculation.

The applicant, an employee of the Central Public Works Department (CPWD), retired from service on June 30, 2020

Upon retirement, he began receiving pension; however, he was not granted the annual increment that fell due on July 1, 2020, despite having completed one full year of regular service

The applicant sought the grant of one notional increment for the purpose of pension re-fixation, relying on the evolving jurisprudence from the Hon’ble Supreme Court

He submitted representations on March 1, 2024, and December 31, 2025, which remained undecided by the respondents

Consequently, he approached the Tribunal seeking a direction for the grant of the notional increment and consequential pensionary benefits in light of Union of India v. M. Siddaraj

1. Whether a government servant retiring on June 30th or December 31st is entitled to the benefit of one notional increment for the purpose of pension calculation, having completed one full year of qualifying service

2. Whether the applicant is entitled to arrears of pension based on such notional increment in accordance with the timelines and modalities prescribed by the Hon’ble Supreme Court and the DoP&T

The Tribunal primarily applied the law settled by the Hon’ble Supreme Court in Director (Admn. and HR), KPTCL v. C.P. Mundinamani (Civil Appeal No. 2471/2023), which established that increments are earned for service already rendered and cannot be denied merely because the employee is not in service on the date the increment is technically credited

This principle was affirmed in Union of India v. M. Siddaraj (SLP (C) No. 4722/2021)

The court further relied on the Supreme Court’s interim order in MA Diary No. 2400/2024 dated September 6, 2024, and the subsequent Department of Personnel and Training (DoP&T) Office Memorandum (OM) dated October 14, 2024, which clarified that for third parties, the enhanced pension based on one notional increment is payable on or after May 1, 2023, without arrears for the period prior to April 30, 2023

The Tribunal observed that the legal entitlement to a notional increment for retirees of June 30th and December 31st is no longer res integra

Since the applicant had rendered the requisite qualifying service with satisfactory conduct, the completion of the one-year cycle was the deciding factor, rather than his status on July 1st

The Tribunal noted that the DoP&T’s instructions dated October 14, 2024, explicitly direct departments to calculate pension by taking into account one increment for those retiring a day before it becomes due

Following the principle of judicial propriety, the Tribunal held that since the issue had been settled by the Apex Court and followed in numerous previous instances by the Tribunal, the applicant was entitled to similar relief

The Tribunal emphasized that the grant of this notional increment is limited to the calculation of pension and does not extend to other pensionary benefits, in alignment with the Supreme Court's interim directions

The respondents were ordered to revise the applicant's pension and pay the resulting arrears within eight weeks from the receipt of the order

The payment of arrears is to be governed strictly by the modalities laid down in M. Siddaraj and the DoP&T OM dated October 14, 2024, particularly regarding the cut-off dates for financial benefits

No costs were awarded